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Posted: April 14, 2009

A123Systems Awarded $100 Million in Refundable Tax Credits from Michigan Economic Development Corporation

(Nanowerk News) A123Systems announced today it has secured more than $100 million in refundable tax credits from the state of Michigan and has selected Livonia as one of the sites where it is planning to base new production plants. The refundable tax credits issued by the Michigan Economic Development Corporation (MEDC) will help implement A123’s existing strategy to establish Michigan as the
manufacturing hub to meet demand from its growing global automotive customer portfolio, which includes the recently announced Chrysler partnership, several other automotive manufacturers and 19 vehicle models -- ranging from hybrid electric vehicles to electric vehicles.

This announcement follows the designation of A123Systems as a Michigan Center of Energy Excellence. In November, the company was granted $10 million by the state to create a research and development institution focused on advanced lithium-ion batteries for the automotive, defense and alternative energy markets. The Center will be based at the Livonia production facility and work in collaboration with the University of Michigan and Michigan State University on joint research, system design and performance measurement projects.

A123Systems first invested in Michigan when it acquired Ann Arbor based T/J Technologies in 2006. The company later expanded operations by establishing an automotive engineering team that is currently located in a facility in Novi.

"Today is truly a milestone for A123Systems, the state of Michigan and everyone interested in creating new markets where American innovation creates sustainable job growth in engineering, research and manufacturing,” said David Vieau, A123Systems’ president and chief executive officer. “With the support of the state’s leadership and highly-skilled workforce, we expect that our planned new facilities in Michigan will serve as a global product center, powering a new generation of cleaner, more fuel efficient cars and trucks.”

In the last month alone, A123 announced a strategic partnership with Chrysler to supply battery cells and systems for Chrysler’s ENVI line of range-extended and battery-only electric vehicles expected to launch next year, and will produce battery cells for Shanghai Automotive Industry Corporation (SAIC), the manufacturer of China's first hybrid electric vehicle. To meet this growing demand, A123Systems will continue its efforts to forge strategic partnerships with both private and public organizations to advance the company’s goal of creating an advanced battery ecosystem in the U.S.

“Today's recognition of this Michigan-based partnership represents tremendous forward thinking by the government, and demonstrates how government can greatly affect the development of – and costs associated with – this type of advanced technology,” said John Bozzella, Senior Vice President - External Affairs and Public Policy, Chrysler LLC.
"Chrysler is proud to participate in this effort that will bring high-technology jobs to Michigan, and will help solidify American innovation in electric vehicles – ultimately leading to more advanced fuel-efficient vehicles for the American consumer and the environment.”

A123 was born out of the research labs of the Massachusetts Institute of Technology and was funded initially with a $100,000 grant from the US Department of Energy in 2001. Among the companies using A123 batteries, battery systems and technology in the fields of transportation, grid energy storage and portable power are AES, BAE Systems, Better Place, Black and Decker, Cessna, Chrysler, Daimler, Delphi, Duke Energy, General Motors, Google.org, LADWP, Madison Gas and Electric, Magna Steyr, Mercedes Benz High Performance Engines, Procter and Gamble, Sempra and Volvo Truck.